Comment by DiogenesKynikos
2 months ago
> Nowhere because the USA has an excellent internal flight and interstate highway system instead. Railways were already becoming uncompetitive by the 1920s and now live on mostly in parts of the world where they already exist, where land is at a premium.
The fact that railways were becoming uncompetitive in the mid-1900s is why high-speed rail was developed. The Japanese pioneered high-speed rail in the 1960s, dramatically increasing the speed that passenger trains could run. That not only made trains competitive again, but hands-down the best mode of transportation for distances of a few hundred kilometers. The result is that new high-speed rail networks are being built around the world, not just in places where rail is already prominent.
In places where high-speed rail exists, it has taken most of the market share away from short-haul flights. If you want to get from Paris to Brussels (300 km), or from Beijing to Shanghai (1200 km), you take the train. This is despite the fact that Western Europe and China have excellent highway networks (China's highway network is now superior to the US interstate system) and plenty of airports.
> China is still a communist country: we know how that story ends and why.
China is not at all like the USSR.
> NASA didn't impress him, but the 30,000+ products for sale in a mundane shop blew him away.
China has an absolutely crazy abundance of consumer products. These days, Americans turn to Ali Express to get random widgets or knick-knacks of any kind. China is the place where you can pull out your smartphone, order pretty much anything, and have it arrive by courier 15 minutes later (okay, that's a slight exaggeration, but not much of one).
People take HSR sometimes because it's heavily subsidized, especially in China. Without government intervention rail can't compete against airports and roads. China's railway is in a staggering amount of debt due to mass overbuilding of the sort that would have bankrupted any normal company in a market economy long ago:
https://www.reddit.com/r/China/comments/vt7jrz/a_whopping_90...
> China is not at all like the USSR ... China has an absolutely crazy abundance of consumer products
Products for export, yes. It doesn't have a particularly strong consumer economy because its model is to keep Chinese labour poor whilst building up huge foreign reserves and gutting foreign competitors. That's why Chinese consumption is still far below the US:
https://capx.co/xi-jinpings-coercion-is-destroying-his-own-e...
"private consumption accounts for just 39% of the economy – extremely low by world standards (the figure in the US is 68%). But there is no consumer confidence, with 80% of family wealth tied up in property and no meaningful social safety net."
The TGV in France makes a profit. As does the Shinkansen in Japan. Intercity routes in the UK aren't high speed but are all profitable. Rural rail lines are not profitable and commuter lines are about break-even, depending on the fares charged. E.g. the tube in London is break even as it receives no operating subsidy, but it's quite expensive compared to e.g. the Paris / Madrid / Berlin metros. If you want to lubricate congestion in your city an easy way to do it is to encourage people to take a more space efficient form of transport by subsidising this. As a business proposition it probably makes sense for the overall region in the same way that it makes sense for a factory to move stuff around on conveyer belts rather than having everyone carry stuff from one station to the next. Britain has low productivity compared to the western EU average. It is posited that one of the big reasons for this is that our infrastructure is a bit shit.
TGV doesn't make a profit by any normal accounting standards. As far as I know every line except Paris-Lyon has received large subsidies. The Bordeaux-Toulouse line requires a subsidy of 35 EUR per year per passenger for the next 50 years. Nor are tickets even cheap as a consequence. Supposedly it's cheaper to drive the moment you have at least two people in the car (I haven't checked that claim, probably there are routes where it's not true).
Rail in the UK requires subsidies. Once again you can play games with non-standard accounting, like by excluding the cost of track and stations, but those are the bulk of the costs. If rail subsidies were zeroed tomorrow every single railway in the UK would go bankrupt the day after. This is also true for the Tube which certainly isn't break even - where on earth did you read that? They were once able to cover daily operating costs from ticket fares, but Sadiq Khan put an end to that and now they can't even cover operational expenditure without subsidies from central government. Even back when they were able to balance the daily books they only achieved that by starving capital expenditure and not building up any kind of profit margin, meaning that any kind of upgrades or repairs have to come out of additional subsidies.
https://tfl.gov.uk/corporate/about-tfl/how-we-work/how-we-ar...
The Shinkansen has a long history of building unprofitable lines which led to JR's eventual "bankruptcy" in 1987, ending up 28 trillion yen in debt. After being semi-privatized they were given a lot more leeway to shut down their unprofitable lines, but even so, it's viable mostly due to the government ensuring they have access to nearly unlimited risk free and repayment-schedule free money (ZIRP).
Passenger railways are fundamentally not possible to run as ordinary free market companies. They were run that way once, but the railways were built out on the back of huge private sector investments in infrastructure. Governments the world over then nationalized them and redirected funds towards staff/union pay settlements or reducing ticket fares, cutting infrastructure spending to compensate. The result is a massive overhang of tech debt that now can't be paid off without unrealistically high ticket price rises.
British productivity is low because it has cheap labour due to effectively unlimited immigration. Companies invest in productivity improvements when labour becomes expensive, otherwise they don't bother, it's easier to just throw more people at a problem. None of that is really a secret, it just doesn't get talked about much because the British ruling classes don't like to criticize immigration lest they be called racist - however, this is a purely economic issue. Railways hardly matter for productivity and commuting may even harm it for many people, as evidenced by the popularity of working from home.
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Air travel is also heavily subsidized, and road travel even more so. One of the real reasons for the interstate highway system (not the purported reason -- defense -- that got the bill through Congress) was to break the back of the rail monopolists (and, importantly, the rail unions). The American state chose to literally invent a whole new kind of socialized transport (marketed as a form of consumer individualism) than just nationalize and upgrade the railroads like every other civilized country.
Air travel is taxed not subsidized. As far as I know there are no subsidies to the airline industry, unless you get into very ideological arguments by claiming the US military is a form of subsidy to anything that depends on fossil fuels. Double checking Wikipedia confirms this. After a huge page listing all the taxes, there's one unsourced paragraph claiming that "some" governments subsidise air travel with a "who?" dispute filed against the claim:
https://en.wikipedia.org/wiki/Aviation_taxation_and_subsidie...
Road travel is usually profitable for the government as fuel taxes cover more than the costs of building and maintaining the roads. Drivers end up subsidizing rail in every country that I know of. It's possible EV cars will start to change this.
US passenger rail is nationalized. Amtrak is majority owned by the federal government, for example.
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> People take HSR sometimes because it's heavily subsidized, especially in China.
Most forms of transportation are subsidized. Good transportation infrastructure benefits the entire economy, so governments subsidize it. The fact that people can travel between cities easily and quickly facilitates business.
> China's railway is in a staggering amount of debt due to mass overbuilding
HSR is heavily utilized in China. A lot of the continued rail construction is because existing lines are butting up against capacity constraints.
> Products for export, yes.
I'm talking about products in their own shops. Chinese consumers have access to a much wider array of consumer products than Americans have.
> private consumption accounts for just 39% of the economy
Now, you're mixing completely different topics. Lower spending on consumption isn't because there aren't products on the shelves. It has to do with things like Chinese people's propensity to save, China directing more of its GDP into investment, and on the flipside, the United States' trade deficit.
Most forms of transport aren't subsidized. Air travel and road travel isn't. Cargo shipping isn't.
> The fact that people can travel between cities easily and quickly facilitates business.
Governments like claiming this but dig in and you'll find they have no robust evidence for it. It also just fails a quick reality check: if it were true then passenger railways would be profitable in their own right, as businesses would be happy to buy tickets for employees at their true costs. Yet passenger rail is never profitable and what we see in reality is lots of workers preferring to work from home than take even the subsidized railways into the cities.
You can argue for trains as a lifestyle thing, maybe even an environmental thing although EV are changing that. But you can't argue for them economically.
> HSR is heavily utilized in China.
HSR is famously mostly empty in China. Go read accounts of anyone who has travelled on the newer lines.
> Lower spending on consumption isn't because there aren't products on the shelves
Nobody stacks shelves with products that will never be sold. Lower spending on consumption means the goods are being exported, and Chinese people aren't buying what they make because they don't have enough trust in the system to do so. Hence so much money being ploughed into real estate bubbles (an attempt to save money in something that's hard to confiscate).
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the low consumption as part of GDP also has to do with different ways of reporting GDP. they dont include some government funded services in the consumption share of GDP, when similar services are included in other countries consumption shares.
china consumes 30% of cars, 20% of mobile phones, 40% of televisions, 25% of furniture, etc. in basically every consumer category they exceed 20%. how can that be true and at the same time they have an abnormally low "true" consumption rate?
https://www.project-syndicate.org/commentary/china-household...
https://asiatimes.com/2023/11/consumption-in-china-is-it-rea...